–METI Survey: Output Likely to Rise in Both September and October
–METI Keeps View After July Data Downgrade: Output Taking One Step Forward, One Step Back
–METI To Watch Effects of Downside Risks to Global Growth, Inflation
By Max Sato
(MaceNews) – Japan’s industrial production came in slightly firmer than expected in August, being unchanged on the month after a drop in July and a rise in June, as higher output of gasoline and heating oil was offset by a pullback in automobile production that had been recovering steadily on improved supply chains, preliminary data released Friday by the Ministry of Economy, Trade and Industry showed.
From a year earlier, factory output marked the second consecutive fall amid slowing global demand but the decline was smaller than expected.
The METI’s survey of producers indicated that output is expected to post a solid gain in September and rise further in October.
The METI said it will keep a close watch on the effects of downside risks to global economic growth and a rise in prices, warning about the drag from high interest rates in major economies except for Japan and China’s slow recovery from its pandemic slump. It had removed the effects of materials supply shortages from its watch list last month.
The key points from the data:
* Of the 15 industries, 10 posted decreases from the previous month and five marked increases. The decrease was led by lower output of passenger cars and auto parts as well as steel and non-ferrous metal products (fiber-optic cables, etc.). Higher production was seen in refined petroleum products (gasoline, heating oil and naphtha) and electrical machinery (car lighting products, Xray equipment, etc.).
* Based on its survey of manufacturers, METI projected that industrial production would rise 5.8% on the month in September (revised up from a 2.4% rise forecast last month) and rise a further 3.8% in October. Adjusting the upward bias in output plans, however, METI forecast production would still rise a solid 3.7% in September.
* From a year earlier, the production index slumped 3.8% in August after falling a revised 2.3% in July, being flat in June and rising 4.2% in May, which was the first increase in seven months. It was smaller than the median economist forecast of a 5.4% fall (forecasts ranged from 6.6% to 4.3% drops).
* The index of industrial production (100 = 2020) stood at 103.8 in August, unchanged from a revised 103.8 in July. It is well above the recent bottom of 87.6 hit in May 2020 but below 108.8 seen in January 2020, when the pandemic hadn’t had a widespread impact yet. The index briefly jumped to 108.8 in April 2021, 109.0 in June 2021 and 107.8 in August 2022.
* Production fell during the first wave of the pandemic in 2020. After a pickup later that year, more waves of infections caused logistical bottlenecks amid reopening demand and prompted parts supply delays from Southeast Asia, where lockdowns hit factory operations in August 2021. Later, easing supply bottlenecks pushed up production from October to December 2021. Output has since fluctuated widely, ending fiscal 2022 to March 2023 with a slight 0.3% drop on the year following a 5.5% jump in fiscal 2021 and a 9.5% slump in fiscal 2020.
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Contact this reporter: max@macenews.com
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